New York (HedgeCo.Net) – Proving once again how important it is for hedge funds to properly vet their service providers, hedge fund manager/consultant Stephen Colangelo Jr., has been charged with 2 counts of scheming to defraud investors out of more than $2.7 million. The charges each carry up to 20 years in prison.

Colangelo mislead investors, the U.S. Attorney’s Office in Manhattan said, by making “fraudulent performance statements, private placement memoranda, and other business documents.”

Colangelo operated Brickell Fund L.L.C., and so-called “consulting sites” Hedge Community, Start A Hedge Fund, and Under the Radar SEO. He then defrauded investors out of more than $1.6 million and is alleged to have stolen more than $1.1 million in connection with his other business ventures. The grand jury gave the verdict of guilty on one count of securities fraud and one count of wire fraud.

Stephen Colangelo billed himself as “one of the foremost experts on private placements and hedge funds” and claimed on his website to “teaches investors and entrepreneurs the intricacies of how to leverage hedge funds for big profits, secrets that have made only a handful of savvy investors millions and even billions of dollars.” However, an online search pulls up records of a arrested in Miami in 2007 on 12 charges that went from Scheme to Defraud to Grand Theft and Burglary.